[amp_mcq option1=”Increasing” option2=”Maximum” option3=”Falling” option4=”Minimum” correct=”option3″]<\/p>\n
The correct answer is: C. Falling.<\/p>\n
Marginal utility is the additional satisfaction or benefit that a consumer receives from consuming one more unit of a good or service. Average utility is the total utility divided by the number of units consumed.<\/p>\n
When marginal utility is equal to average utility, average utility is at its maximum. This is because the additional satisfaction from consuming one more unit is equal to the average satisfaction from all the units consumed.<\/p>\n
After marginal utility is equal to average utility, marginal utility starts to fall. This is because the consumer is getting less satisfaction from each additional unit consumed. As a result, average utility starts to fall as well.<\/p>\n
Here is a graph that illustrates the relationship between marginal utility and average utility:<\/p>\n
The marginal utility curve is the blue curve, and the average utility curve is the red curve. The two curves intersect at point A. This is the point where marginal utility is equal to average utility. After point A, the marginal utility curve starts to fall, and the average utility curve starts to fall as well.<\/p>\n
I hope this explanation is helpful!<\/p>\n","protected":false},"excerpt":{"rendered":"
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